12.10.22: Audio automatically transcribed by Sonix

12.10.22: this mp3 audio file was automatically transcribed by Sonix with the best speech-to-text algorithms. This transcript may contain errors.

Producer:
Any examples used are for illustrative purposes only and do not take into account your particular investment objectives, financial situation or needs, and may not be suitable for all investors. It is not intended to predict the performance of any specific investment and is not a solicitation or recommendation of any investment strategy.

Producer:
Welcome to Financial Freedom with your host Safe Money Bob. Get set for a full hour of financial information and economic news you can't afford to miss. Bob works hard each day to educate Americans like you on how to reach the Financial Freedom they've worked so hard for. And he can help you too. So now let's start the show. Here's Safe Money Bob.

Producer:
Hello and welcome to Financial Freedom with Safe Money Bob, thanks for making us a part of your weekend. And of course, you can listen to our show anytime via our podcast catalogue found on Apple, Google, Spotify, or of course, wherever you get your podcasts. All right. Coming up on today's show, we're jam-packed. Bob will help answer the seven questions you may have about retirement, Plus saving money during the holiday season and saving you the stress as well. It is indeed possible and we'll explain coming up. So let's give a nice, warm welcome to the man of the hour himself. Safe Money Bob.

Bob Loss:
Excellent, Jim.

Producer:
And now for some financial wisdom, it's time for the Quote of the Week.

Producer:
Jackie Joyner-Kersee, a retired track and field athlete and Olympic gold medalist, is at the center of our financial wisdom this week. And Bob, Jackie said, quote, It's better to look ahead and prepare than to look back and regret, unquote. And again, that is from Jackie Joyner-Kersee.

Bob Loss:
Absolutely. So if you ever go to my company website, you'll see I have a quote. It says, People don't plan to fail. They fail to plan. And the other thing I always share is preparation alleviates stress. So when you prepare for something, it doesn't put the pressure on you. You kind of have an idea of what's going to happen and it's sort of the same thing with your finances, planning out income, planning out things being paid off and so forth. So definitely a good quote to live by.

Producer:
All right. Well, again, we thank you for tuning us in this week on the radio side or of course, on the podcast end of things as well. And this week's show is for all of you out there who have been disappointed with the performance of your retirement accounts this year in 2022, We know it's been difficult to look at your statements and see the numbers dropping, even though you've continued to work hard and save consistently. For example, the S&P 500, that's down 17% here in 2022. And the Nasdaq, that's down 29% here in 2022. So, Bob, considering a traditional 401. K rollover in service distribution.

Bob Loss:
Absolutely. I've done this actually a year ago, almost to the month. I think it was November. Gentlemen, you have to reach 59 and one half and you have to have an in service distribution clause if you're currently working at your employer, active. So what we were able to do, and I'll get into it a little more detail, but in essence, we moved 80% of his 41k into a fixed indexed annuity where he zeros his zero. So at this point the index hasn't gone up, but his balance has stayed the same. So good stuff. But yeah, so there's a myth and you can't touch your money. You saved your 41k or the retirement accounts. Well you can always do rollovers, especially from an old 41k if you're separated from service. But you also have these in service distribution clauses that are part of some of these plans. Most people can remain with their company, stay in the plan, but continue to take advantage. So he's still doing his max match. He has 20% of his money still being allocated and balanced quarterly. And I can tell you, based on the amount he probably say we saved him 60 to 70000 out of his what he would have lost on paper had we not done what we did. So, again, if you're within five years of retirement, you consider taking usually you can go. Some of them are unlimited. I was surprised that one was.

Bob Loss:
A lot of times it's up to 50% of your of your dollars and you can take advantage of zero fees, zero risk and potential growth and set yourself up for income that you can't outlive. So back again, this was a couple let's see both I think 60 or 60 years old. He's looking to retire in a couple of years and she actually is an accountant and does accounting for people. Again, like I've said before, for a lot of people, I have CPAs, accountants, they send me not only are they my client, but they send me their clients to do what we do to help people. And again, if you want to learn more about service distributions rolling over old for one KS, even if it's from a previous employer and you have one at your current employer, you know, definitely give us a call at 908 359 2861. Leave a message and someone will set up a call with me 1530 or 60 minutes, whatever you desire, free of charge. And then also if you want to go to SafeMoneyBob.com And call me there. You can do so as well. And I appreciate everybody listening on weekends, 8:00 AM on WBCB Radio. But yeah, we can definitely help you with this subject. I've done these before. Some plans don't have that option. Hang in there with Financial Freedom, with Safe Money Bob and we'll help you figure things out.

Producer:
All right. Well, great information there, Bob. Hey, the seven questions you have about retirement. We'll answer them coming up. And don't forget to reach out to Bob. It's SafeMoneyBob.com or call the man of the hour himself at 908 359 2861. Financial freedom with safe money Bob. We'll be right back.

Ford Stokes:
Chapter three famous people who invested a significant amount of their hard earned wealth in annuities. Big idea Annuities are for everyone, even if you're not worried about outliving your wealth. Annuities are safer for your money than investing in stocks or bonds or simply not investing at all. Babe Ruth, known as the Sultan of SWAT, Babe Ruth, came into his glory days during the Roaring Twenties, and his manager was worried that he was blowing through all of his money without putting any of it away. He introduced Babe to an insurance agent from the Equitable Insurance Company, now AXA Equitable from 1923 to 1929. The slugger contributed more than half of his salary annually, purchasing between 35,050 thousand worth of annuities each year. The Great Depression hit the country hard. In October of 1929, Babe Ruth was forced to retire from baseball in 1935 due to health reasons he was unemployed during the worst time in history. But Babe Ruth had his income annuity. It's been reported that he received an income of $17,500 a year, which would translate into an annual salary of more than 290,000 in today's dollars. His famous quote still resonates today. He said, I may take risks in life, but I will never risk my money. I use annuities and I never have to worry about my money. Steve Young. Steve Young was signed out of Brigham Young University into a $40 million contract with the USFL. That was the headline, at least in reality.

Ford Stokes:
Young was given an annuity that would pay out something like $40 Million over the 50 years that followed. Given the fact that some players were not paid for playing in the final season or other seasons of the USFL, accepting the annuity appears to have been a genius move on the part of either Young or his agent. The annuity payments have lasted longer than the league, and it's safe to say that he's made more money than probably anyone else involved with the league. To be fair, it couldn't have happened to a nicer guy. Even with a large signing bonus and salary, he continued to wear old jeans and drive a 19 year old Oldsmobile dynamic. In addition to outlasting the league, that annuity even outlasted the Oldsmobile car company with a staggering number of pro athletes going broke after they retire. It's refreshing to read stories about players who made smart financial choices. Shaquille O'Neal, one player who's used annuities to his advantage is retired star Shaquille O'Neal, a his 19 year career. He generated $292 million in total compensation. In retirement, he is projected to make as much as $1,000,000,000 from endorsements, even after his career is long over, thanks to a wise agent who made him put $1 million annually into annuities from his rookie year onward. Shaq lives off the income the annuity generates with his endorsement legacy for his children. Shaq scenario demonstrates how pro athletes and other prodigious earners can protect themselves against their own personal spending errors.

Ford Stokes:
Allen Iverson. Nba player Allen Iverson earned $200 Million during his career $155 Million in salary and 40 to $50 Million in endorsement deals. Iverson ended up going bankrupt because of his overly lavish lifestyle. In a December 2012 court filing, Iverson told the court that his monthly income was $62,500, but his expenses were 360,000. Luckily for Iverson, Reebok saved him from becoming destitute by paying him an annuity worth $2.3 million in 2001. Iverson made a very smart decision that would ultimately save him. He signed a unique endorsement deal with Reebok. Not only will Reebok pay Iverson 800,000 a year for life, they set aside a $32 Million trust fund that he can begin accessing when he turns 55 years old in 2030. Since he divorced his wife in 2013, he will receive half of the trust. Another way that Iverson will be able to protect himself against future bankruptcy is his access to the NBA pension. He is eligible for another 8000 a month. The lump sum of this pension is between 1.5 and $1.8 million. Most pensions are set up with single premium immediate annuities. Benjamin Franklin. When Benjamin Franklin died, he requested that the 2000 sterling he earned as the governor of Pennsylvania from 1785 to 1788 be divided equally between Boston and Pennsylvania. He wanted the money to be dispersed as a legacy 200 years later in the spring of 1990. The balance in the Philadelphia account was valued at approximately $2 million, and the balance in the Boston Trust was about $4.5 million.

Ford Stokes:
This was sometimes called Franklin's IRA. The money in the Boston Trust was invested using a new take on an old idea the annuity using a tax deferred index variety. The money was able to benefit from exposure to stock market growth without stock market loss. This allowed the trustees of the Franklin Institute in Boston to turn an estimated $4,400 into 4.5 million, even while it was paying out an income for 200 years. Beethoven, the social luminaries of Vienna, wanted to keep Ludwig van Beethoven from leaving their country. And so in 1809, two princes and an archduke guarantee the musician a generous annuity. All he had to do was stay in Vienna and compose and perform his music. His benefactors have supposedly been quoted as saying something along the lines of only a man free of worries can create with such genius. Interestingly enough, Vienna also saw its time of economic downturn, and one of the annuities guarantors tried to stop paying Beethoven, claiming financial hardship. Beethoven sued, won and continued to receive his annuity payments. Perhaps this is what inspired the literary genius of Jane Austen, whose character Fanny observes in Sense and Sensibility. People always live forever when there is an annuity to be paid. An annuity is serious business. It comes over and over every year and there is no getting rid of it.

Producer:
107.3 WBCB Financial Freedom with Safe Money Bob Hey, don't forget complimentary for listeners to the show Full retirement consultations. Bob provides comprehensive consultations at no cost to his listeners and there's absolutely no obligation. You only work with Bob if he can do better for you, and I assure you he can. Bob will discover exactly how much you're paying in fees and help you cut unnecessary costs in your IRA 401 K or any other retirement savings account. Bob can also help you with Social Security planning and Medicare as well. So contact Bob at 908 359 2861 or visit SafeMoneyBob.com. All right SMB it's time to discuss the seven signs that you may be ready to retire.

Bob Loss:
Well there's many but we're going to focus on seven at this point. You're going to want to figure out based on your budget, we want to figure out if your family home is paid off. You have no mortgage. That's one key. Some people will carry a small mortgage or a small balance depending on their terms and their interest rate. If they're only paying 2.3% or 2.5%, a lot of times in the payments, not very large because the mortgage isn't that big, then they'll keep it. But that's one sign for sure that you might be getting close. Another biggie is no credit card debt. That's got to be one of the most important things. Even even, I'd say more important, have a no credit card debt than having a mortgage balance, because you can always jostle the mortgage down depending on how the rates are. You keep making it a smaller and smaller payment. If you have one. If you don't have one, you're just dealing with things. We've got to consider taxes, insurance, upkeep, maintenance, up updates. As you know, as we live in these houses longer and longer. I've been in my house almost, what, 18 and a half years, and I think I have to start doing things over again that Ira took care of. So it's definitely something to consider. You want to have a fully have if you have. This is helpful. I have a fully funded emergency fund. What is an emergency fund? Well, people will say checking account savings, account, money market CD's. It can also be in cash value life insurance that you have access to, even even retirement plans.

Bob Loss:
If you're over 59 and one half and you have a portion of that money saying stable value as a spot, you would pay tax on it, but it's another bucket. So you want to have multiple buckets. That's the key. You want to smoke a bucket of which you have risk mitigated fees mitigated potentially taxes mitigated depending on what accounts you have. You also another point is you don't want if you're not supporting your children or other family members, because that can be a big burden. It can affect how you or when you can retire. So that's another important point. Hopefully your kids are successful. They went out to their trade school, they went to college, they got their masters. They're working. They have a steady income, pretty good job security. Maybe they started a business like I did when I was 27 years old. But you have to have an income plan that makes sense and has multiple sources like I mentioned. So you have you have Social Security potentially. You have a pension, potentially you have your 41k, hopefully you have other Roth IRAs or high cash value life insurance like myself that I can pull tax free income and I can stagger it. And again, if you're losing interest or you're just getting tired at your current job working, some people when they retire, they don't not. Work. They stopped doing what they were doing, and then they find something like, for example, I have a client, I'm not even mention them last week.

Bob Loss:
He is like a ranger at a golf course, checks people in and such, and he's still working part time, like 25% of the time. He was working maybe like 10 hours a week or something, but just enough to help us not tap into his various buckets. And him and his wife are taking their Social Security. They are 66 and 68, I believe, and that's part of our income plan. And we've got plenty of liquidity. And he just decided he doesn't want to have anything or little to nothing at risk in the market. So we're making another shift from his 41k and his cash balance pension into a vehicle that can grow. While we tap into a couple of other things. He has to get that money out of where it is and use that for income while maintaining all his liquidity in the bank and also growing without risk, worry or fees depending on his what he chooses to do in a fixed index annuity. So those are the seven signs. It may have to be all of them, but if you have a majority of those and you're in that situation, definitely reach out. SafeMoneyBob.com and book a call with me or call us at 908 359 2861 and leave a message and one of my staff will get back to you. Set up a convenient time for us to discuss your situation further, but those are the main points you're going to want to consider and we can help you with that.

Producer:
Yeah, Bob, last week we talked about credit card debt, getting out of credit card debt, how important it is to get out of credit card debt, not get into credit card debt. And that's the one thing that really stuck out to me on that list, being someone who's a little bit on the younger side and not necessarily putting all of my eggs into one basket as it pertains to retirement and not not necessarily not thinking about that, but nevertheless getting out of credit card debt. That's something that's so, I think vitally important for people in their early thirties, even in their twenties, but especially in their early thirties, late thirties and into their forties.

Bob Loss:
Absolutely. If you can get out of that. And I think I explained it as possibly last week, I'll review real quick. So what I always recommend, I think what I did actually when I was younger, I actually had some credit card debt was I pay off the smallest balance first and then the next one and then the next one. And whatever payment I was making on the smallest one, I add it to the the next one in the wrong, and then you've got to celebrate every time you pay one off. Like maybe it's you get you get steaks from the market and you grow or maybe you get pizza and have a pizza night and get a movie or hopefully you got a streaming series, streaming service. So in that situation you could just watch something, but you want to reward yourself. Even if they're small, you feel their small conquests. Regarding your finances, I can tell you like just anything from paying off credit card, paying off a car. And again, if you want to do it the way I do it, you would like to borrow from yourself from high cash value life insurance and pay yourself back. Be the bank, be the borrower and the banker. You can be the borrowing, the banker, and you can understand the flow of money. It's not about returns. People think retirement security is about returns.

Bob Loss:
It's not about returns. It's about guaranteed income. It's about mitigating risk and having multiple sources of income. So definitely the credit card debt being taken care of is a biggie. I mean, that's got to be square one. Number one, get rid of that. And I always say to try to as you go through life and if you are still working, pay yourself first. I have premiums which are basically my investments into my various insurance policies and myself, my wife and my two kids. They come out every month same time. That's it. There's no I don't sit here and decide, Oh, I'm not going to do that now. They get paid before my mortgage. They get paid before the cars, which I'm paying back to myself. So that's not a big deal. But still, you just want to have debt. Debt will paralyze people. Those who don't have debt or they have very strategic debt. And proper rates on that debt payment schedule, etc. you're just going to have a lot less stress in life. And we all want to be happy. We don't want to worry about money. So hopefully I can help you with that. Again, go to SafeMoneyBob.com Book a call or call me at 908 359 2861 and we'll set up a call to discuss your situation further.

Producer:
All right, Bob. Coming up, seven questions we can help you answer for retirement. Plus, we'll hear from Matt McClure about holiday savings, its Financial Freedom with Safe money Bob. We're back in a moment.

Producer:
Helping bring you one step closer to Financial Freedom. You're listening to Financial Freedom with Safe Money Bob.

Producer:
Are you concerned about market volatility, rising taxes, economic uncertainty, and how it all could affect your future in retirement? Then tune in to Financial Freedom with Safe Money Bob, to learn how you can protect and grow your hard-earned money. Financial Freedom Weekends at 8:00 AM right here on WBCB. am 1490 and 107.3 FM. Protect your hard earned money today and schedule a free consultation now at SafeMoneyBob.com.

Ford Stokes:
Chapter 15 Bond replacement with fixed indexed annuities. Big idea. Historically, bonds have seen volatility when the market is volatile. Fixed indexed annuities are not subject to the same volatility, which makes them a much safer investment. You might have heard a financial advisor talk about replacing your bonds with annuities to protect your wealth and grow your retirement funds. And my firm, Active Wealth Management, we believe this is a smart way to protect your future. Many people have learned that bonds are a safe way to invest your money, but there are some downsides to bonds that should make you think twice. We'll talk about some reasons why you should consider replacing your bonds with annuities. First, here's some information on the history of bonds in the United States. Historical bond volatility. The 1900s saw two secular bear and bull markets in US. Fixed income inflation peaked at the end of World War One and World War Two due to increased government spending. The first bull market started after World War One and lasted through World War Two. The US government kept bond yields artificially low until 1951. The long term bond yields were at 1.9% in 1951. They climbed to nearly 15% in 1981. In the 1970s, globalization had a huge impact on bond markets. New asset classes such as inflation protected securities, asset backed securities, mortgage backed securities, high yield securities and catastrophe bonds were created.

Ford Stokes:
Early investors in these new asset classes were compensated for taking on the challenge. The bond market was coming off its greatest bull market coming into the 21st century. Long term bond yields declined from a high of 15% to 7% by the end of the century. The bull market in bonds showed continued strength in the early 21st century. But there is no guarantee with our current market volatility that this will hold. See Chart 15.1 To see the incredible difference of investing in a fixed index annuity versus investing in bonds. Why you should consider replacing your bonds with annuities. The first question you should ask yourself is this Why would you take market risk with your bonds when your bonds can lose their value? If you just look at the history alone, you can see how uncertain the future of bonds is. Inflation and fluctuating interest rates play a big role in bond yields. Interest rate, risk of bonds, bonds and interest rates have an inverse relationship. When interest rates fall, bond prices rise. Due to the COVID 19 pandemic, investors have moved their money to bonds because they believe it is a safer investment option. However, this has caused bond yields to fall to all time lows. As of May 24th, 2020, the ten year Treasury note was yielding 0.64%, and the 30 year Treasury bond was at 1.27%.

Ford Stokes:
Reinvestment risk of Bonds. This is the likelihood that an investment's cash flows will earn less in a new security. For example, an investor buys a ten year, 100,000 Treasury note with an interest rate of 6%. They expect it to earn 6000 a year. At the end of the term, interest rates are 4%. If the investor buys another ten year note, they will earn 4000 instead of 6000 annually. Consider the possibility that interest rates change over time when deciding to invest in bonds. Systematic market Risk. This refers to the risk that is inherent to the market as a whole. It will affect the overall market, not just a particular stock or industry. This can be unpredictable and it is impossible to avoid. Diversification cannot fix this issue. But the correct asset allocation strategy can make a big difference. Unsystematic Market Risk. This type of risk is unique to a specific company or industry similar to systematic market risk. It is impossible to know when unsystematic risk will occur. For example, if someone is investing in health care stocks, they may be aware of some major changes coming to the industry. However, there is no way they can know how those changes will affect the market. There are two factors that contribute to company specific risk business risk.

Ford Stokes:
There are two types of risk internal and external. Internal refers to operational efficiency. An external would be similar to the FDA banning a specific drug that the company sells. Financial risk. This relates to the capital structure of a company. A weak capital structure can lead to inconsistent earnings and cash flow that can prevent a company from trading reduced advisory fees. Investors who trade individual stocks may know how much commission they are paying their broker, but individuals who buy bonds often have no idea what type of commission they are paying. Bond dealers collect commission on bonds they sell called markups, but they bundle them into the price that is quoted to the investors. This means you are unaware of. How much commission you were actually paying. Standard Poor's estimates of bond markups is 0.85% of the value for corporate bonds and 1.21% for municipal bonds. However, markups can be as high as 5%, up to $50 per bond. Bonds have finite durations. Bonds only provide income for a finite amount of time, unlike an annuity which provides income for life. You must reinvest your money if you want to continue generating interest with bonds. However, reinvesting with a bond can sometimes come at a loss, as we discussed above. Annuities will provide you with an income you can never outlive.

Producer:
Helping bring you one step closer to Financial Freedom. You're listening to Financial Freedom with Safe Money Bob.

Producer:
Welcome back to Financial Freedom with Safe Money Bob 107.3 WBCB. Coming up, how to save money during the holiday season. Sit tight for that. But right now it's time for this week's problem solver.

Producer:
It's time for this week's problem solver.

Producer:
Bob, Edward and Marie are a married couple who are both in their early sixties. Ed is an accountant and Marie is an office manager. They both have retirement plans through work and are consistently saving enough to maximize the free company match while reducing their current annual taxable income. They've been great savers, but both are disappointed in what has happened to their balances this year. Each of them, they've seen 20% or more in losses year to date.

Bob Loss:
Well, first we look at their entire portfolio and see what's where, what's what's getting whacked, what isn't, if anything, and looking at their risk on. I mean, the big thing is they're putting money away and it looks like they're getting their matching getting the match they should. So their problem is that too much of their money is at risk. So Ed and Marie would both do is do a traditional 41k rollover or in series distribution. When I say distribution, it's not taxable. It goes from trustee to trustees. So it's not taxable to a new account specifically, probably fixed index annuities with or without riders to guarantee income or to increase their growth potential. This will allow them to implement a more risk efficient, market efficient and fee efficient strategy. I do this all day, every day. It's such it's such a bonus when you can grow your money, not pay fees on it. If you choose. Get guaranteed income down the road when you want it and you don't have to worry because zero is your hero. So what they would do is what they have done. And I've again had another example earlier, so they would withdraw the maximum amount. Of funds so that they can still remain in the company plan but take advantage of the match. And then we take that. And what we'll do is we'll have those assets also get rebalanced quarterly in their current plan. But then the assets we do take when we say withdraw again, tax free. Trustee to trustee in service or rollover into the contract of their choice or option of their choice. There's a lot to go into it and you have to look at everything.

Bob Loss:
So when we implement something like this, we have our initial consultation, which you can set up again at SafeMoneyBob.com Or 908 359 2861 by calling us. We look at your whole situation. Listen to what you want to accomplish. Let's listen to what's most important to you. And from there, put together a plan that's like a working document. We can do it right on the screen in front of each other. And you can watch me while I'm talking. And my associate will sit there and maneuver all the information and change things. We can play with inflation. That's been a biggie, right? You can't just look at it, say, okay, it's growing. I don't have any risk on most of it. Okay, well, what about inflation? So we have to look at what's going to what is going to cost you if we go by some historical reading inflation rates versus what we have now, we can be a little more aggressive with a higher rate Just to see the plan will be fine. We want to make sure that your plan has a high probability of success, that you won't run out of money, that maybe you can leave money in a tax efficient manner to your family if you so choose, that you have coverage through various options to mitigate the risk of long term care expenses eroding your retirement as well. So that's pretty much what you do. You take more control of more of the assets and control the risk. The fees and potential guaranteed income down the road.

Producer:
All right, Bob, let's answer the seven questions about retirement.

Bob Loss:
So when should you or your spouse claim Social Security benefits if you haven't already? You know how the best way to maximize your benefits. So. Some will let the older or the higher income earner let their money or their Social Security benefit grow. Wait till at least their full retirement age or FRA, if you've heard of that before. Some will even wait till 70 while the other spouse will take half of that person's benefit or they'll actually start taking it at 62. Like, for example, if I have a couple where one is healthy and the main wage earner, the other one isn't as healthy, doesn't have longevity in her or his family. And we may recommend they take some of that income. Others will just defer both. They want to get the max benefit, and it does grow at 8% from full retirement age to age 70 and a half. Then from there, I mean, where are you getting where are you getting that rate of return? 8% guaranteed, no risk. Like, can you get it? Yeah, I have people that have gotten it. But for the most part, most people don't know how to do that. You want to know? Another question would say is like, what's your budget? What's your tax plan? Is it going to change you accounting for inflation and future tax increases like I just mentioned? So you have to figure out inflation. You have to plan for things that you may have to replace.

Bob Loss:
You want to have a steady budget that is attainable. You can't set a budget. And then six months into it, you're spending $1,000 more a month and you're not really getting anything for it. You're just it's lifestyle things. So you have to plan for those things. Very, very important planning again. People don't fail to plan. People don't plan to fail. They fail to plan. I should get that copyrighted anyway. How should you best manage your account balances and RMDs so you can control have another client where the goal would be to spend down. They're qualified money and let the Social Security. Benefits grow. Why? Well, because of their situation. Because of their income level. It's possible if they don't change the level where Social Security is taxed, that that won't be taxed because we'll have gotten the requirement minimum distributions low enough and also have their bills low enough so that they can live the retirement they want. They're not fancy. Go on mega trips that cost tens of thousands of dollars or anything. One loves to just tinker around in a shed and the other one just wants to babysit the grandkids. So excuse me. But that's sort of the deal with that. If you can control required RMDs by using the qualified money, the 41k money, the IRA money, or even doing some Roth conversions from IRA to Roth. I'm doing it. I actually have it in my calendar to do that.

Bob Loss:
My wife's two small accounts. She's got a. And fortunately, one of them was transferred in when she her company didn't make it through COVID. So that was sitting in a cash balance this whole time because I didn't reinvest it. So we didn't lose anything on that money. I saved my 20%, but we're going to recharacterize those and flip them. So you should again, what I just mentioned about the Roth, these are these are tools. These are strategies that can help you implement based on your situation. So, again, reach out to me at 908 359 2861. Go to safe money BBC.com and register. Register for a time to speak with me and I appreciate you again listening to the show on AM on Saturdays and Sundays on WBB Radio. I really appreciate it. I'm hoping I'm giving you guys value information, education, you know, tearing the curtain down a little bit on all these things without you having to pay somebody $500 an hour to do that. So the other thing here to think about these seven questions, we can help you with is what should you do with your real estate? We touched upon this earlier, like, do you downsize? Do you have a mortgage? If you have a mortgage, what interest rate is it? Can we do better with the money? Do we just not want a payment? Do I want to downsize? It's tough, you know, because you think about how you want to live.

Bob Loss:
And everybody likes the idea of their kids as they're adults coming back to the house and they still got their room and all that, but sometimes financially. It's not it doesn't make sense because it's just too detrimental to the whole plan. Do you have rental income? For example, do you want to still have the responsibility? A couple I just mentioned, not Ed and Marie, another couple, they just sold their investment property and we're planning on either paying their mortgage down to a point where it's small, like 80,000 balance maybe. Otherwise we might just take. We have other resources potentially we can use to pay it down and pay it off. So all they have to do is pay their taxes, insurance, utilities, cable, whatever. And then you also want to have a plan. Here's another question. What is your plan for Medicare and any potential long term care needs? So what could devastate someone who's secure with their amount of retirement money? They have the mental risk, their control, and the amount of fees they're not paying. Long term care event. And it doesn't have to be both. Both people. Both husband and wife could be one of you. One of you, for whatever reason, just might not have that part of your life. When you get older and you're going to need care and you don't want your spouse or your kid taking care of you if you don't have to.

Bob Loss:
I've seen it firsthand. What it does, it ruins the quality of life for that, for that spouse or that sibling per say. You know, I watched it personally, my family. And it just takes the quality of life away from. The people who are kind of helping with the caregiving. So you want to have that covered and you don't have to go and just buy a long term care policy, pay premiums and never use it and get nothing like that. That boat, that ship sailed. There's a lot of things we can implement to help not only fund your Medicare supplement policy, but also, you know, create something where if you don't use the money, you get your heirs get it tax free. If you do have to use some of your money, you're leveraging it sometimes two or three times per dollar on benefits that all you have to do is say, I need money for this bill and they'll give it to you. You don't have to sit here and jump through hoops. I mean, normally you have to have a doctor's note, but other than that, they're not sitting there scrutinizing things like the old the old plans. And you have to decide to what would your legacy want to be for your children or grandchildren? What about you? Myself and my family. Clients of mine. Like, not only do we want to have a secure retirement for themselves, we want to make sure we got college covered.

Bob Loss:
Do we want to have mitigate risk and fees and worry? All that being said, while maintaining the lifestyle that they want in retirement. You didn't work all life to just have it go to the government or have it go to a nursing home. Right. We all we all work to provide for our families and we do charity things. We donate to charities all while having a secure retirement. But if you can leave a legacy in the form of tax free life insurance for pennies on the dollar, you wouldn't believe it. More people buy more life insurance over age 60. You would think it was all the young people. It's not what it is. People are taking their spending. It allows them to spend more of your money. So if I have $1,000,000, say I have $2 million, I don't think $1,000,000 hack it anymore. Say $2 million and I have life insurance of $2 million that cost me 200,000 to fund it. Let's just say round numbers. You know, I have my legacy set. So if I want to use the other money or I need to use the other money to take care of myself, that people care for me for for lifestyle, paying, paying any taxes, insurance, all the jazz updates, car changes, all that pay myself back at the same time. I'm going to want to. Then I want to also leave my kids better off than when I started out.

Producer:
All right, Bob. Well, the holiday season is here and Matt McClure has a story about holiday spending during the 2022 season.

Producer:
As the song.Says, it's the most wonderful time. But don't let holiday spending wreck your retirement plan. I'm Matt McClure with the Retirement dot Radio Network. Powered by AmeriLife. Just over $832. That's how much the National Retail Federation says the average American plans to spend on holiday gifts, food and decorations this year. Many of us will spend much more than that. So how do you keep from overdoing it? Financial website Investopedia has some tips on keeping holiday spending under control. Number one is perhaps the most important set spending limits for yourself. Tyler Ferguson with Jax Federal Credit Union agrees.

Tyler Ferguson:
Some can even go old school like myself and use a cash spending plan to ensure that you're staying inside of your budget. You're actually using cash to mitigate those swiping of the cards. It's also an effective plan if you have kids wanting to shop as well.

Producer:
That from News 4 Jax. The number two tip from Investopedia is to make your own naughty or nice list. In other words, if you're shopping list includes more than five people outside your immediate family, start cutting it, then bake cookies or other treats to give to those who didn't make the cut. That way you spread holiday cheer without breaking the budget and you don't seem like Scrooge. Humbug. Other bits of advice from Investopedia include being realistic about your budget. Collecting coupons or discount codes and organizing group volunteering instead of holiday parties. Ferguson says one thing you should not overlook is getting the kids involved.

Tyler Ferguson:
For the younger kids, you want to give them a smaller dollar amount, maybe a $10 cash transaction to kind of help provide them a visual observation of what they're using the funds for. And then for your older kids who have either been saving themselves already or they have a lump sum to kind of go shopping with can open up an account for them. Go over how to budget and how to spend.

Producer:
So how can you give this holiday season without busting your budget? That's a key question to consider. As Santa starts warming up the sleigh with a Retirement dot Radio Network powered by AmeriLife. I'm Matt McClure.

Producer:
Welcome back to Financial Freedom with Safe Money Bob, if you missed any part of today's show, subscribe to the program in podcast form Apple, Google, Spotify, or wherever you get your podcast. And hey, be sure to listen to the show on both Saturdays and Sundays at 8:00 AM right here on 107.3 wbcb All right, it's time for Bob's favorite game, right or wrong.

Producer:
Come on down as we test your financial knowledge in. Right or wrong.

Producer:
Bob, Right or wrong, when it comes to your IRA 401 K or other retirement plans, the best strategy is to set it up, forget about it, and just keep saving. Is that right or wrong?

Bob Loss:
So saving is great. Keep saving that piece, I'll say. Och, but to forget about it, put it away and say just Och it's going. No, you want to, you want to review all of your retirement plans whether it be with the person that helps manage it with you at your employer or an advisor like myself that you work with for funds outside of your 41k that might be an IRAs, might be in mutual funds, it could be in variable annuities, other types of annuities that you might have before that. But yeah, you definitely the best strategy is to stay on top of everything. No, don't go nuts reviewing it, but review have it auto rebalance, always selling high and buy and low and try to have 6 to 8 Subaccounts is what I recommend for people. So you don't get too much in one thing and just keep an eye on it. And any time you see a change, like maybe the employer changes your match in that situation and say, Oh yeah, we're going to put up to 5% match 5%. Now it was only 4% or maybe it went the other direction. So just keep aware of everything going on with your money. Don't take anything for granted.

Producer:
All right. Right or wrong? Number two, the types of fixed income products or bonds you hold in your portfolio don't matter as long as you have a portion dedicated to fixed income. Bob, is that right or wrong?

Bob Loss:
You have to look at everything right now this year. Bond the bonds. I believe it's the bond performance and the stock performance are both getting hammered like that doesn't normally happen. So if you're sitting in this fixed portion thinking, oh, I'm all rosy and everything's fine. Not so fast. As Lee Corso likes to say on college game day, you want to have that bond. Bond replacements. One of the biggest things we do, we take people's bond portfolios and put them in fixed index annuities without the fees, without the interest rate risk, depending on the account, it's going to be taxable or not taxable eventually when you take it. And we can even set up that guaranteed income I've been talking about. I mean, that's that's when you have true control. Think about all your friends. Who's the happiest? I'll tell you the answer. The answer. The happiest clients I have, people I know. They have a pension, guaranteed income, possibly guaranteed income from somewhere else. They get to see their family and hang out with friends. Those are the people that are happiest in retirement. So that just goes right to what we just went over with, right or wrong. I believe we all want more, Jim.

Producer:
All right, Bob, let's see if I can avenge the last two. Is this right or wrong? You can delete fees on the bonds you currently hold by replacing them with an investment that offers market like gains without market risk. Bob, is that right or wrong?

Bob Loss:
That would be correct. That would be right. Ding, ding, ding. And I just touched upon it. I jumped the gun a hair, but I couldn't help myself because I get excited about these things. Yeah. Fixed indexed annuities. They are. They've evolved so much. I mean, it's like it's like you have you can attain growth that you never thought was possible and you're not risking your money. In most cases, you don't have to pay a fee and you control that. You're controlling it, you're controlling the risk, you're controlling the fees, you're controlling your money, you're taking a portion and not living up to chance by people we don't even know the country around the world, whatever. You don't know what's going to happen. I mean, you're sitting here all of a sudden, you got Russia going into Ukraine. I saw that coming. You know, other things, inflation going to like in the last two years, ridiculous amounts versus what it used to be. So you want to take control of everything you can control. You want to minimize the holes in the bucket, the draining factors, and that's one thing you can control.

Producer:
All right. Hey, Bob would love to meet with you and discuss your future. And he can help make retirement feel like the next starting line and not a finish line in your life. Many retirees continue to work and volunteer sometime on a weekly basis in order to stay active and involved. So for more information, visit SafeMoneyBob.com Saving you money and headaches this holiday season. That's the headline of this week's cost cutter.

Producer:
Here's the cost cutter of the week.

Producer:
Och bob seven key factors in saving money and those headaches of course, this holiday season.

Bob Loss:
All right. So here we go. Buckle up. You want. Take notes. Even better, Set up a call with me at SafeMoneyBob.com Or 908 359 2861. Give us a buzz. We can do this together. You want to be doing this yourself? Do you. Do you do your own taxes? Drill your teeth with your tools in the garage to take get rid of any cavities you may have. No, you're not going to do that. You're going to write. You're going to write your legal paper. You need for some legal matter. No. You want to work with a professional, whether it be me, someone you're working with already, get another set of eyes and utilize. Utilize our knowledge and what we do for ourselves and our clients and our families. Because why wouldn't they? Why would I suggest that if I wasn't doing it myself, that's what I would say. So here we go. A create a holiday budget. Almost nobody does this. Honestly, I have to talk to my wife more because I've got to see what kind of things she's been doing. But my budget is pretty easy. I'm like, I don't need anything, so don't buy me. But yeah, you want to try to get bargains. Like, I don't know if you all bought things on Black Friday, Black Monday, whatever they call it Cyber Monday.

Bob Loss:
It seems to be Cyber Tuesday, Wednesday, Thursday, Friday, whatever. They just keep extending things. But start with a budget. Try to have a plan. Like we say, you know, you can alleviate stress by preparing. I have a plan. Don't don't say, oh, I'm going to spend $1,000 on my kids and then spend 2000. I know it's going to be tough, but you can be frugal with these things. Like I just mentioned, you want to shop early. So if you shop early, real quick, Power Tip looks like free shipping day is on December 14th, 2022, from over 1000. Big name and online retailers that will have your item shipped and get to you by the 24th can be a great way to finish last minute shopping. Save on shipping costs. Right. Another savings tip and avoid the crowds. You're not driving, right? Who wants to drive everywhere with the cost of gas? And now people out there the online way is another way to save for sure, especially with the free shipping day on December 14th. This one's kind of tough, but it depends on where your family lives. Like my family, we're all within 25 minutes of each other, so we all migrate to my parents and we don't even cook anymore. We get we actually have Italian food on Christmas.

Bob Loss:
But you can stay home, you know, stay home, especially if it's a real far trip. But you still visit. You just visit maybe on different times. So maybe instead of Christmas Eve or Christmas days, the day after, maybe it's the weekend before or the weekend after. If you've got to travel farther. Right. Some people have to jump on plane if you can travel when it's not peak season for various holidays, that's another way for you to save money. Also, you can stay in nicer places if you're off peak or you stay in moderate nice places. If it was peak and they definitely gouge you, the airlines for sure. Just flying my daughter home, changing her flight $188. I'm like, well, it's a direct flight and she wants to be home. So I did it. But it's just different ways you can you can save money. So the other thing is how about the gift of your time does always have to be present, you know, physical items. It could be you just basically say, I'm going to come visit, I'm going to cook for you because I'm a good cook. Or maybe I can make I'm a woodworker so I can make something nice that you could put as a decoration not only on a tree, but on your house and keep it there as a reminder of family.

Bob Loss:
And as far as we've done this before, too, the kids used to all we just had Secret Santa. So we do Secret Santa. So instead of everybody buying for everybody. So it's just basically the kids meeting the parents, buying a gift for whoever is picked. So we have six kids or grandkids whether we want to save it was my parents, be grandkids, and we'll have a couple of things they'll give each other hints and nobody knows who's doing what. And then that's how we work it. So we went from this big, tremendous event, from a gift giving standpoint down to just one niece or one one cousin buys for the other cousin, one nephew buys for the other, the other nephew, meaning the parents helping out. But and the other thing is, too, you can have people bring dishes. So like, we'll have people bring we'll all bring appetizers, all bring appetizers. Know somebody makes those deviled eggs, which I love them and I always eat them on Christmas. That's the only time I get to eat them and the only time I get them for the person who makes them so tremendous, love them and then we'll split up. Like if we have catering or get takeout instead of going to a dinner.

Bob Loss:
It's another way to save. We can't make it all the meals because of the situation. Then we'll we'll just share in the cost. So it's not hitting one person all at once. And in fact, what I mentioned earlier, it's kind of along this line, you could do it yourself. So you can make things, you can cook things, you could do art, pottery, baking, what have you, whatever you, whatever you are good at. You can use that talent to make somebody feel like you care and that you thought of them when you did it. So that's just seven things you can do to to save money during the holidays. I know it's fun buying things for people and watching their reaction because that's it's not about receiving. It's about giving. Just seeing the reaction, especially when the kids were little, Oh my God, they get so excited over stuff. But again, you can reach me for help on any of these things that we've discussed today. Any of these topics, just share your situation and they'll call me at 908 359 2861 and leave a message and someone will get back to you. Set up a call or go to SafeMoneyBob.com And book a call with me anytime I'm available and I'll listen to your situation and try to help you.

Producer:
Great show this week, Bob. Great information. Hey, don't forget, if you've missed any part of today's show, please subscribe to. The podcast on Apple, Google, Spotify, and listen at any time, any point in the day, any time you really want to. And of course, join us every Saturday and Sunday, 8:00 am right here on 107.3 WBCB We'll talk to you next weekend.

Producer:
Thanks for listening to Financial Freedom with Safe Money Bob. You deserve to work with a financial and insurance expert who can offer proven strategies for protecting and growing your hard-earned money to schedule your free no obligation consultation. Visit SafeMoneyBob.com or pick up the phone and call 908 359 2861.

Producer:
Not affiliated with the United States government. The agency does not offer tax, legal or investment advice. Consult with your tax advisor or attorney regarding specific situations. Opinions expressed are subject to change without notice. These opinions are not intended as investment advice, nor do they predict future performance of any product. All information provided is believed to be from reliable sources. However, we make no representation or warranty as to the accuracy of any statement. This information is intended to be educational in nature and does not provide a guarantee or specific result. All copyrights and trademarks are the property of their respective owners. AmeriLife assumes no responsibility or liability for the content of this message. The information contained herein is provided on an as-is basis with no guarantees of completeness, accuracy, usefulness, timeliness, or of the results obtained from the use of this information.

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